Abstract
The research examined interest rate deregulation and the performance of deposit money banks in Nigeria for the period of 1989-2020. The objective of the study is to examine the impact of interest rate deregulation on the performance of deposit money banks in Nigeria and to examine the causal relationship between interest rate deregulation and performance of deposit money banks in Nigeria. The estimation output of the research shows a positive relationship between interest rate and bank performance in Nigeria measured by Total Assets of Deposit money banks in Nigeria. The coefficient of determination (67%) also shows above average explanatory power of the independent variables on the dependent variable. The results of the study show a long and short run relationship between the dependent variable (Total Assets) and the independent variables (Interest rate, inflation rate, loans and advances). The result also shows unidirectional causality between Total Assets and Loans and Advances. The research recommended among others that the CBN should consider not frequently changing the MPR (monetary policy rate) and CRR (Cash reserve ration) which most of the time influence interest rate peg of the deposit money banks.
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